SNP MP claims independence would lead to five years of austerity

George Kerevan suggests five years of "fiscal consolidation" would turn an independent Scotland into "an economic powerhouse"

An independent Scotland would face five years of budget cuts to become competitive on the world stage, according to an SNPMP.

Writing for London financial newspaper City AM, East Lothian MP George Kerevan advocates the introduction of a new currency, suggesting five years of “painful” budget cuts would turn Scotland into an “economic powerhouse”.

The claim is a marked difference from the party’s stance during the previous referendum on independence, when a Yes vote was portrayed as a route out of austerity.

Since then the oil price has plummeted and the UK has voted to leave the EU.

Kerevan suggested the fallout from the Brexit vote means independence may now be supported by “anti-Brexit groups who voted No to independence in 2014: Edinburgh’s middle class, farmers and swathes of Scotland’s business and financial community”.

Scotland could emulate other small countries like Iceland and Ireland which recovered quickly from the financial crash of 2009 with “a separate Scottish currency pegged to sterling”, he argues.

“Scotland’s post-independence fiscal consolidation should take only five years (one parliamentary cycle), lifting her economy on to a high productivity, high growth path by shifting resources from consumption to investment,” said Kerevan.

“That’s painful in the immediate short term but will allow Scotland to escape the ball and chain of the UK’s endemic low productivity.”

Kerevan, who sits on the Commons Treasury Select Committee, is part of a team of MPs considering currency options for an independent Scotland after the issue was seen as a decisive factor in 2014’s No vote.